Mike, a 19 year old full time college studen, earned $3,000 in wages and had a n
ID: 2584400 • Letter: M
Question
Mike, a 19 year old full time college studen, earned $3,000 in wages and had a net profit of $750 from self-employment. His maximum IRA contribution for 2016 is:
A. $750
B. $3,697
C. $3,750
D. $0
Joe, a retired single taxpayer, began receiving a montly pension from his former employer in Jan. 2016. He was age 66 when he received the first payment, and the pension will pay over the course of his life. He received a Form 1099R for the tax year showing a gross distribution of:
$8,000 in box 1,
code 7 in box 7,
and total employee contributions of $20,000 in box 9b.
Box 2a is blank, and box 2b indicates that the taxable amount is not determined.How much of Rick's distrubtion is taxable?
A. $16,858
B. $8,000
C. $6,858
D. $0
Chuck will retired this year. Net year he will receive social security benefits of approximately $18,000; 401k distribution of approx. $24,000 and his IRA RMD of approx. $9,000. He has not planned to have tax withheld on any payments nor has he filled out anything to exempt his payements from being taxed. How much tax will be withheld from his payments?
a. $1,250 withheld from social security
b. $0
c. $900 withheld from his IRA
d. $4,800 withheld from 401k
Rick, a retired single taxpayer, began receiving a monthly pension from his former employer in January 2016. He was age 68 when he received the first payment, and the pension will pay over the course of his life. He received a Fom 1099-R for the tax year showing a gross distribution of $8,000 in box 1, code 7 in box 7, and total employee contributions of $20,000 in box 9b. Box 2a is blank, and box 2b indicates that the taxable amount is not determined. How much of Rick's distribution is taxable? O so S6,858 s18858 Mark for follow up Question 11 of 15. Edna has traditional IRAs with a value of $250,000 as of December 31, 2015. She will turn 70% on November 11, 2016 and would like to take her RMD by December 31, 2016 How much of a distribution should she take to meet the RMD? O so, no istribution is required S9,124 O59,434 O S10.00D Mark for follow up Question 12 of 15. Rose files Form 5329 with her tax returm. Part 1 of the form has been completed and shows a code 3 on line 2. There are no other entries on the form. Which of the following tatements best describes why Rose would include this form with her 2016 returm? O She tumed 55 years of age during the tex year and recelved a retirement plan distribution ater separating trom service. She wants to report an exception to tha esrly distnbution penalty O Rose received a retirement plan distribution due to a permanent and total disability. She wants to report an exception to the early distribution penalty Rose eserved a retre ent plen distribution n for unreimbursed medica unreimbursed medic expenses during the year at e ceeded 10% other ad usted gross income (AGI) tor the year . She wants to report an exception to the ear y di bution penal y O Rose received a distribution from her IRA which she used to purchase her first home. She wants to report an exception to the early distribution penalty.Explanation / Answer
IRA stands for Individual Retirement Account.Maximum IRA contribution permitted for 2016 for those under age of 50 is $5500 subject to the limitation that contribution should not be more than the earning for the year.
In the question Mike is a 19 year old full time college student his total earnings are as follows:
Wages: $3000
Net Profit from Self employment: $750
Total Earnings: $3750
Accordingly maximum IRA contribution will be $3750.